The invention relates to the field of financial instruments.
One known financial instrument is an equity collar, which is comprised of a combination of an equity put and an equity call. An equity collar around the current stock price is created by purchasing a put option with a strike price at or below the current stock price and selling a call option with a strike price above the current stock price. Investors use an equity collar to hedge their exposure to stock price fluctuations. By establishing an equity collar, a minimum and maximum market value is created around the investor's equity position until the options expire.
Systems and methods are needed to allow a company to hedge or manage fluctuations in their own stock price.
One of the methods used by businesses to raise funds is through the use of letters of credit, and many letters of credit are secured by company assets that are pledged in support of the letter of credit.
Insurance companies have reserve requirements that may impact the company's underlying credit or assets.
Systems and methods are needed that support the issuance of letters of credit and that do not consume a company's credit capacity.
The preceding description is not to be construed as an admission that any of the description is prior art relative to the present invention.